Miftah Ismail to be appointed Privatisation Commission chairman

Sardar Sukhera to be secretary; conflict of interest could arise

ISLAMABAD: The federal government has temporarily filled vacant posts of the Privatization Commission (PC) chairman, and its secretary, indicating that it will not actively pursue the privatisation agenda during its last year in power.

It has decided to appoint Dr Miftah Ismail as chairman, said an official of the finance ministry. Ismail is also chairman of the Board of Investment (BoI), and Sui Southern Gas Company (SSGC). The post of PC chairman fell vacant after the government appointed Mohammad Zubair as Sindh Governor early this year.

However, Ismail will have to walk a fine line while dealing with the case of privatisation of Pakistan Steel Mills (PSM). The SSGC has cut gas to PSM for the last three years and it did not restore the supplies despite various attempts made during Zubair’s period. There is also a lingering issue of allocation of PSM land for National Industrial Park. The government has also given the additional charge of PC secretary to Sardar Ahmad Nawaz Sukhera, who will also continue to serve as Ministry of Information and Broadcasting secretary. Before his appointment as information secretary, Sukhera remained as PC secretary and has $1.7 billion worth capital market transactions to his credit.



Sukhera is an officer of the Pakistan Administrative Service who earned his MPA degree from Harvard University, and Master of Arts (Development Economics) from Williams College. He also holds a BSc (Hon) degree in Economics, specialising in Industry & Trade, from the London School of Economics.

The government’s decision to temporarily fill the posts of PC chairman, and secretary suggests that it does not have a plan to actively pursue the privatisation agenda during its last year in power. There are half a dozen privatisation transactions awaiting the government’s decision.

The issues of privatisation of SME Bank, PSM, divestment of Gujranwala Electric Power Company (GEPCO) shares at the Pakistan Stock Exchange (PSX), and sale of K-Electric majority shares to a Chinese company require government’s approval.

Vast administrative and financial powers rest with the PC Board, which could not meet during the past six months in absence of its chairman and secretary. The government may have to take the issue of pre-qualification of the SME Bank bidders to the PC Board for its approval.

The SME Bank is a hot cake in the market, especially for those who want to venture in the banking sector for the first time, as the State Bank of Pakistan is not issuing new licences for commercial banking. SME Bank is the only specialised financial institution that lends to small and medium-sized enterprises. Although the bank’s financial condition is far from impressive, its licence has become very pricey.

The government holds 93.89% stake in SME Bank while 2.56% stake is with the National Bank of Pakistan. The United Bank Limited has 1.66% shares, followed by HBL 0.83%, MCB Bank 0.62% and ABL 0.32%.

The government has also committed with the Asian Development Bank to list GEPCO at the PSX to raise funds for retiring the stock of the circular debt. The decision on PSM, particularly settling of liabilities, would be a critical matter for the PC. Since the PSM is on the active list, the law empowers the PC to take all the administrative and financial decisions about the entity.  The federal government wants to give the PSM land to the National Bank of Pakistan and SSGC to settle their dues.



However, the PSM management could not settle a decade-old issue of giving 930 acres land for building the National Industrial Park (NIP) at book value of Rs13 million per acre. The book value is significantly lower than market rates, which go up to Rs20 million per acre.

Although the PSM has not allotted the land to the NIP, over 750 acres land had already been “illegally” given to influential private parties, said sources in the Ministry of Industries and Production. BoI Chairman Miftah Ismail played a role in that matter, they said.

However, Ismail denied any role. He had told The Express Tribune that on the desire of the finance minister, he had intervened sometime back only to settle the land price issue between NIP and PSM as it was affecting foreign investment.

On Thursday, Ismail did not respond to the question of conflict of interest.

Published in The Express Tribune, July 14^th, 2017.

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